(Reuters) – Drugmaker Mallinckrodt is speaking to hedge funds about submitting for chapter and avoiding funds supposed to assist individuals hooked on opioids, the Wall Road Journal reported on Wednesday.
Shares of the corporate rose 53.3% to 69 cents in afternoon commerce.
As a part of a prearranged deal, Mallinckrodt will suggest to jot down off about $1 billion from what it nonetheless owes to dependancy victims and state and native governments, whereas making a one-time cost of roughly $250 million, the report mentioned, citing individuals acquainted with the discussions.
Mallinckrodt didn’t instantly reply to a Reuters request for remark.
A gaggle of hedge funds, together with Greenwich and Silver Level Capital, is in negotiations with Mallinckrodt’s board to provide them management of the enterprise by means of a chapter submitting, in response to individuals acquainted with the discussions, the report mentioned.
Mallinckrodt, which is likely one of the largest producers for opiods, had filed for chapter safety almost three years in the past. It reached a $1.7 billion nationwide settlement as a part of its chapter reorganization plan and emerged from Chapter 11 final yr.
The corporate in June mentioned it was contemplating a second chapter submitting and different choices after its lenders raised issues over the $200 million cost associated to opioid-related litigation.
(Reporting by Sriparna Roy in Bengaluru; Enhancing by Devika Syamnath)
